bell" will have much more on this deal. >> down 54% year to date. thank you so much for joining us today. >> i'm off tomorrow. you got here. happy thanksgiving, everybody. >> "closing bell" is next. hi, everybody. we enter the final stretch. welcome to the "closing bell." i'm marcich -- maria bartiromo the new york stock exchange. a shocking loss at hewlett-packard, damaging the entire market. the story broken here on cnbc by david faber earlier. >> this has been a really newsy day for a holiday shortened week. i'm bill griffeth. let's show you the markets, how they've been trading here. it will be pretty evident when ben baernanke made that comment that the fed doesn't have the tools to deal with the economy should we go off the fiscal cliff. down it went. we were down 94 points on the dow on the low of the session.

now off that low, down 39 at 12,756. nasdaq's lower. apple is also lower today after that monster 7% plus rally yesterday. it's down about a percent right now. the nasdaq down 8-plus points. the s&p is down 3 at 1383. >> not a lot of news from the bernanke lunch except this. the federal chairman warning that if the economy does go off the fiscal cliff, he can't help. he has no more tools. take a listen. >> we can certainly have a meaningful contribution to supporting recovery, but in particular, in the worst case scenario where the economy goes off the broad fiscal cliff, the largest fiscal cliff, which according to cbo and to our own analysis would throw the economy into recession, i don't think the fed has the tools to offset that. that's why it is important for congress to address these fiscal

issues soon. >> boom. that's where it was. you got that immediate market reaction. you were there. there was a reaction at the crowd too. >> everybody has agreed that was the one thing he said that was probably new information and market moving. and you saw the market move from down 17 on the dow to down 70 on the dow industrials pchl. >> just like that. how worried should investors be? let's find out on today's "closing bell" exchange. steve, are we making too much of this? you know, we know what kind of tools they have available. we know that monetary policy is often at odds with fiscal policy, right? >> with due respect, bill and maria, i think you are making too much of it. he said it before. i don't think there's been any expectation that given the size of the gdp hit that would come from the fiscal cliff, i would be surprised if the market really thought the federal reserve could lean against it,

and specifically, i forget when it was, july, perhaps august, bernanke used almost that exact language. so if i was to say what spooked the market today from the bernanke speech, two things stood out to me. the first was a generally down beat tenor pointing out that if we avoid the fiscal cliff, there is going to be drag next year from federal fiscal spending. the other thing that was curious, and i have been on the phone with economists for a couple hours now trying to figure out the meaning of it. when the federal reserve chairman said that potential gdp, which is the speed limit of the economy, could be below 2.5%. whether or not he was talking about that just retrospectively as in the past or if he meant that going forward. if he meant that going forward, there are important implications. he didn't exactly say that. >> the issue is that that's really what this market reacted to. when he was specifically asked about the fiscal cliff. sam, let me ask you about earnings. in terms of going off the fiscal

cliff, what do you expect the impact to be on corporate earnings? >> i think corporate managers are sitting on their hands anyway, not really putting the money to work that they have on the sidelines. i think certainly it would depress earnings. right now we're in a decelerating earnings environment. fourth quarter is likely to see about a 5.5% gain. that's well down from more than a 15% gain expected earlier this year. the same we've seen is depressing for next year. >> is that priced into the market, you think? >> i think it does. i quite frankly think the market sold off too much following the election. it probably rallied too much yesterday. overall year to date, i'd argue the market is probably higher than it should be given where our economy is right now, our employment right now. a lot of that has been led by government intervention and stimulus. bernanke is right to say they don't have much ammunition left. the private markets need to lead the way. >> the ball is definitely in congress' court. rick, what did you make of what

bernanke said and the market and how they've been responding? it's clear, from nothing else, that this is still a very headline driven market, isn't it? >> oh, especially on a holiday week where it's been thin. my problem with what he said was is that ben bernanke said if we go off the fiscal cliff, he might not be able to impact those head winds in a meaningful way. many of his programs the last couple years haven't addressed the head winds of slowness in a meaningful way. many people down here totally agree. but i think that a tweet by bill gross sums it up best. the tweet is something like this. it said, well, now ben bernanke is acknowledging what we've said is a new normal arriving. i guess it's here. i would agree with that. i think most people i deal with never expected a 3.5%, 4% gdp handle for a long time. the markets reacted very differently. if you look at an interest rate chart, interest rates were virtually ignored and are

actually moving higher, which doesn't fit a weaker economy. many people think that would happen in treasuries today and more european related. looks like greece is going to get their money. >> if you're putting your money, rick, on lower potential gdp, being in the 2% range, i think that's kpexactly what you would do. you would sell treasuries. that would be a quicker finger of the fed on the trigger of raising rates because it would mean there's less slack in the economy. if you think of the potential gdp as the speed limit of the economy, if, indeed, potential gdp is lower, that means we're already traveling at or near that potential already. you could still get a couple quarters of 3%, 4% gdp growth in that 2% environment, but the new normal, if it is 2%, would in general suggest higher rates from here. >> well, i wouldn't disagree with that, but most people i deal with that aren't economists that are trading on a daily basis, either institutionally or

their own account, generically look at slow times as buying times. >> i think there's sop positive areas in the market. i think we could debate whether or not it rally is for real on the equity side. you can't have that same debate on the housing market. i think the housing recovery is for real. new year home starts, five-year high. >> the home builders have been very strong. what do you think? >> i think they are, but if you look into the arena, mortgage rates is another area. they're still building momentum there. >> sam, are you expecting a tough economy in 2013? >> i think a continuation of the half-speed economy. my worry is that because of the duration of this economic recovery, we're now in our 42nd month, and historically whenever we've seen the president go into year one, beyond 20 months, we've ended up in a decline scenario in that subsequent

calendar year. >> what snaps us out of it then? >> i think that the housing recovery is one that would be an improvement. i think expectations that we're going to be seeing a very slow recovery in europe still. about flat for 2013. china back above 8% is the expectation. >> typically, we're in the period of the cycle, the presidential cycle, when they have to make the tough decisions anyway. you begin a new term, especially the second term for a president who has won re-election. you can get some real tough decisions made. it's not good for the economy immediately. >> that's right. but if there is one bit of optimism out of that, the market does perform better when the incumbent has been re-elected because people are not in a sense having to get to know an unknown quantity. they already know what they've got. >> i just want to build on that one little note of optimism. not to overemphasize, but bernanke did say, if we can solve the fiscal cliff problem, if we can make some headway

against these head winds on the economy, i think he said exactly 2013 could be a very good year. that potential is out there. the question you have to ask yourself is, has the market at this point discounted the worst case scenario where there may be a bid in here on a better case. >> we can only hope. gentlemen, thank you all a for joining us. >> thank you, guys. appreciate that. we're in the final stretch. we're off of the worst levels. we have the dow down 26. >> stocks have rallied this week on hopes for a fiscal cliff fix, obviously. then backtracking a bit on reality issues. now the fight on taxes just got more complicated. we're going to look at both side of that issue coming up. >> plus, we'll hear from somebody who says the fiscal cliff is the y2k threat of the hour. jim grant is not concerned. he's here to tell us why. >> we'll tell you what he is concerned about. also ahead, big problems for hewlett-packard. >> we believe there is a willful effort on the part of certain members of autonomy management to mislead shareholders when

autonomy was a publicly held company and mislead buyers, including hp. >> coming up, something doesn't add up. literally. we're going to look at how on earth hp could have miss hadded major accounting irregularities. i gave birth to my daughter on may 18th,

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hardware international has just resumed trading. over to bertha coombs for a quick market flash on that. what's going on? >> thanks, bill. the stock had been halted today. the fda has approved the company's heart pump device. it's similar to the one that former vice president dick cheney had while he awaited his heart transplant. heart failure kills some 300,000 people a year. this one is smaller and actually could be helpful to smaller people because it's implantable in the chest. the stock there, you can see, gapping up to a one-month high. >> all right, bertha. thanks so much. as if it wasn't tough enough getting republicans and democrats to reach a deal on the fiscal cliff, both sides will now have to rise above inside their own parties. >> eamon javers in washington has the latest details here. >> hi, bill. yesterday i was in an empty hallway here on capitol hill.

today we have an empty stairway here. just a couple tour groups up here. otherwise, it's pretty dead here. that's because most lawmakers are already home for thanksgiving break here in washington. the staffers who are here have come up. it's a relaxed day. behind the scenes, we're getting information that we're seeing some movement within the republican party in terms of the grover norquist anti-tax pledge. a couple prominent lawmakers have said that they don't necessarily any longer agree with the pledge that they themselves signed. some of those lawmakers include senator john mccain of arizona, tom coburn of oklahoma, and senator lindsay graham. take a look at this quote. this is what lindsay graham told his hometown newspaper just yesterday. he said, i signed it, meaning the pledge, in 2002. i'm not signing anymore pledges. i'm just going to take an oath to the constitution. i ain't signing no more pledges. that's what lindsay graham says

about the pledge to grover norquist's group not to raise taxes ever on anyone under any circumstances. obviously, with the fiscal cliff looming, that pledge may have to be broken by a number of republicans. i've talked to grover norquist about this issue. he says he's going to hold the line. those members of congress who signed that anti-tax pledge have pledged to the american people, not to him, not to raise taxes. he's going to hold them to t guys. >> all right, eamon. thanks very much. be sure to tune into "the kudlow report" tonight. larry's guest is grover norquist. that's tonight at 7:00 p.m. eastern. raising taxes on only the wealthy does not do a lot to dent the deficit. we know that. still, it remains a focal point on the fiscal cliff negotiations. it's creating a divide among conservatives. >> joining us now to talk about this is j.d. foster from the heritage foundation. he's holding out for true tax reform that would broaden the base and eliminate deductions. john mccormick is staff writer "the weekly standard. he says giving in on raising tax

rates now would give republicans leverage later on tax reform. so we've got a nuanced argument going here. john, what do you mean? what kind of leverage would they need by allowing for the tax breaks now? >> the problem is they don't have any leverage right now as we speak. i mean, president obama just won a decisive election. democrats increased their majority in the senate. the tax rates are expiring. if these tax rates weren't expiring, republicans could hold out for genuine tax reform. i think they need to get ahead of this situation. why not lock in the current rates for everybody under a million and live to fight another day? i think there's more likelihood they'll be able to get genuine tax reform next year if they lock in everybody under a million right now when they have their backs against the fiscal cliff. >> but that's not what they're doing. we doncontinue to see everybody digging in. why should republicans allow the tax increases for highest earners, and why should dems give in on the spending cuts the republicans want?

what is it going to take to get these two sides together? >> the democrats should give in. the fact is they should give in because we have an actual fiscal crisis. we have a real debt ceiling. that's the national debt. this is going to, what, chip away 7% of the deficit, letting the bucks tax rates expire on high earners. any conservative knows we don't have a ref knvenue problem. we have a spending problem. what's the end game here for republicans? >> that's an area where both of you agree on, the spending thing. i want to stick with the taxes for a moment. j.d., you want to see all the tax cuts remain permanent. you're not going to make that distinction between 250 or $1 million or anything like that, you? >> no, i'm not. i don't see how you gain leverage by capitulation at the outset. that's the most bizarre negotiating strategy i've ever heard. if there's ever going to be a tax increase, that's down the road. right now, we have a weak economy. we have no reason whatsoever to raise taxes. the problem is spending. we have no proposals by the president on the key issues.

we remain distracted in this political fight about tax increase. the issue is spending, and where's the president? he's nowhere to be found. we need to focus on spending cuts, especially entitlements. there's a lot we agree on from conservative to liberal. let's focus on those and stop with this political distraction about raising taxes. it's not the issue. >> all right. let's talk about the issue then, as you see it, in terms of spending. where is the low-hanging fruit in terms of cutting spending? i understand medicare, medicaid, social security are the biggies. is that it? >> those are the biggies. that is the low-hanging fruit. there's a lot we agree on. we agree the eligibility age for medicare and social security have to rise. you can read about what they would do on the social security

ak tu wares website. . we foe what the proposals are. we broadly agree on them except where it's the president. he has to lead on them. >> all right. well, we can argue about that. let's get a deal. what's the most likely spending to come from the president right now, spending cuts? >> i don't know. i don't know. it all comes down to what the president actually wants. republicans have their backs up against the fiscal cliff with these tax cuts expiring. j.d. can explain to me a plausible scenario under which republicans can simply stand pat and get exactly

>> they'll kick the can down the road and hope to get actual tax reform and entitlement reform. i don't know. if president obama didn't think about entitlement reform after going to the center, why would

he think about it after winning a re-election? i'm not optimistic on genuine spending cuts and entitlement reform. >> no, which is why i don't think we get a deal by the end of the year. >> uh-oh. >> now i'm changing my mind. i see everybody digging in. i'm recognizing we're back to ideology. so no deal. over the fiscal cliff. recession. let's get ready for it. >> gentlemen, thank you both. such a happy topic. happy thanksgiving. our interview with barney frank told tus will come in stages. they'll figure out spending then the taxes. >> president will never do spending first. >> we'll see. the markets down 25, was down 94 at the low of the day. we've come off the lows as we head toward the close here. vmpbl >> have you checked out best buy today? the stock has lost nearly half of its value this year. there are still best buy bulls throughout. one of them is with us. he'll make the case next. >> it's the question troubling so many americans in keeping adults and children awake at

night. can the twinkie be saved? hostess and its bakers union are holding mediation talks today. we'll bring you all details on that meet whg it's over coming up. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

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oil prices flying today on

reports of an imminent cease fire between israel and gaza. sharon epperson is here with details. >> egyptian officials say there are talks ongoing to reach a truce in gaza. the language is going to be key here and whether or not there's a comprehensive deal, well, that remains to be seen. we are waiting to see whether or not a cease fire is officially reached by the end of today. that was the deadline that was set. obviously, these oil markets are anticipating that some type of deal will be reached. as you look at decline we've seen in the price of crude oil, both brent and wti erasing all of yesterday's gains. we're also looking at the supply picture, which may be weighing on u.s. oil prices as well. we're going to get a report from the energy department tomorrow about crude supply situation. it's expected to show an increase for the week. we're also going to get tomorrow the supply situation for natural gas, a day early because of the thanksgiving holiday. >> all right, sharon. thanks so much. meanwhile, shares of consumer electronics retailer best buy down again today.

down about 13% today alone after a massive earnings miss. this, even though best buy's new ceo, says he's optimistic. here's what hubert jolie told me last week. >> we're pretty excited. we have a lot of products coming on to the market. the apples products, windows 8. a lot of great releases. the associates are very ready to work with customers. we're turning the table on showrooming with price matching. we're ready for the holidays. >> so are you ready? is best buy a value or should we be staying away from this stock? let's start talking numbers now. we have richard ross. on the fundamentals side, jeff pillburg with killer capital and a cnbc contributor. good to see you, gentlemen. rich, walk us through the charts. how do the technicals look on best buy? >> well, the technicals look horrible. i'm not going to walk you through it. i'm going to run very far aa way from this is stock. back in august, i put a sell on

the stock. i'm here to finish the job p looking at this long-term chart, we took out a 20-year trend line. we now have the ominous visage of a four-year held and shoulders. >> hold on. rich, rich, you're missing the whole point. clearly it's been taken out to the wood shed, but what they're doing, the new ceo is really trying to restructure. think about it. just like in the s&p 500, we had the bernanke put. there's a richard schultz put here. the play here is actually to buy some upside calls. there's going to be movement in the holiday season. >> at least with those calls your risk is limited to the downside. of course, we all know. that ceo would have made the worst buy of his lifetime. radioshack, circuit city, no one in the mystery of mankind has ever made money selling consumer electronics in a physical store

other than apple. buy apple. >> you're going to end up like a thanksgiving turkey. you're going to get stuffed. get in the game now. it's a great place to enter. >> jeff, what would it take to change your mind on best buy? what would it take for you to believe that perhaps things have begun to deteriorate? >> well, i think the cash flow. you look at at balance of the cash. still, that goes negative. i think it's okay to hop in here, maria. obviously, this has been a waiting game for quite some time. look back to august when we saw richard come in here talking about taking out $24 to $26. it's worth a shot on the upside. >> it if you wait for the cash flow to go negative, it's already too late. you got to sell it here on the technicals. that's why we look at the charts, to give you a heads up. >> come on over to chicago. i'll buy whatever you're selling, pal. >> that's what makes a market, gentlemen. thank you very much. see you soon. over to you, bill. >> that was fun. 30 minutes left here. market still hovering off the lows. well off the lows.

down 31 points. coming up before the bell here. we were warned of hewlett-packard's acquiring of autonomy. let's remember. >> hewlett-packard bought this company for $11 million. it was a roll-up of software service companies. a disaster. >> that was in july. he saw it. how did the folks at hp miss it? we're going to get into that coming up. p. later, we'll discuss whether hp can be saved as it or whether breaking up the company is in the best interest of shareholders. coming up. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong.

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welcome back. david faber breaking the news today that hewlett-packard

claims to be a victim of accounting improprieties. the company taking an $8.8 billion charge. take a look at the stocks today and what's going on. a huge selloff. down 12% on hewlett-packard. taking the whole market down with it. >> ten-year low on that stock. let's remember, chaim , jim sh one person who saw this coming. here's what he said at cnbc's conference this summer about hp and that autonomy deal. >> the reason we got interested in hewlett-packard was not only the macro stuff. one of our biggest positions was autonomy in london. hewlett-packard bought this company for $11 billion. it was a roll-up of software service companies. the accounting was absolutely dreadful. a disaster. they did almost no due diligence on the deal. it closed quickly. oracle was shown the deal and passed.

within seven months, the ceo and a number of top people all left. >> hp's telling a different story, though, saying they did do the proper due diligence. joining us today on this issue is the leader of the global mna practice. also, herb greenberg, who's been following this story. bob, i'm just astounded at size of this carjack on $8.8 billion. the question being asked today is how they missed that, if they did, in fact, do the due diligence. >> i don't doubt for a moment they did. it was a big deal, a big company. the focus on due diligence is not something new. frankly, since back in -- ten years ago all of this ramped up. frankly, i know had this has been a huge story today. it's not surprising. when you consider that there are 30 to 40,000 deals around the

world with every year, some are going to have problems and leap to conclusions that it was a failure. i think it's a rush to judgment. >> well, how did this happen? when you look at the fact that jim shanos was on to the issues at autonomy back in the summertime, how is it possible that hp didn't see it? also, herb, when you look at all the things that were going on this the summer of -- it was august 2011, i'm told. that's when they did the deal for autonomy. that's when they said they were going to shut down palm. then they were going to consider closing the pc business. then they did this enormous stock buyback p all this stuff in two months during the summer of 2011. you're saying they did the right due diligence? >> these are human beings. i have to tell you something. i have to disagree with bob on this. i have a report here from may of 2010. it's by gradient international,

another independent research firm. they raised many of these red flags going back then. i called up sam antar today. he was the cfo of crazy eddy. he committed fraud. he tried to bamboozle auditors. i said, sam, how do you think the auditors knew? he said, honestly, maybe they just didn't want to believe what they were seeing. >> oh, come on. what does that mean? bob, is that possible an outside auditor can -- again, i'm just thinking back on jim. if he knew about this or this is what he suspected and it's exactly the way it played out, he didn't have the access to the books the way the hp auditors would going into to do the due diligence. how did this happen? >> first of all, again, most deals are fine. hp's done a lot of other deals that worked out just fine. this deal didn't. the fact is we're going to have problems in deals all the time. this one is big because the numbers are so big.

but -- >> and that's why we're asking how it could happen. i could understand a $500 million miss on an $11 billion deal. but $8.8 billion? >> not only that, but the whole time when this was happening, i remember specifically, all the analysts on wall street were coming out with a report saying that $12 billion was way to expensiv expensive. >> that's a different question altogether. the question here is -- >> it is. >> -- accounting. one of the things we have to recognize is accounting for tech companies can be very difficult. it's frequently a matter of judgment. this was flushed out, as they very often are, by whistle blowers. >> if it was flushed out by whistle blowers -- and i'm looking at issues of capitalization on cost which is a big issue at software companies. that's when you spread costs out over a long period of time to try to make the revenues look better than they are. the issue here is there were whistle blowers who saw this. it makes you wonder -- again,

i'm thinking double books. even here you don't have to think double books because the red flags were being raised publicly. >> i also think that, you know, somebody has got to be policing this board. this board has been the most ineffective board. probably worse than the citigroup board over the last decade. when you consider the fact this board hired and fired carly fiorina, hired and fired mark herd, and now we've got meg whitman. what is going on with this board? all those people who were hired and fired in such a short period of time. >> maria, meg whitman was on that board. let's not forget that. >> and it was ann livermore's decision. she was leading the autonomy deal. also, then she retired and went on the board. >> isn't taking the board on a little bit too far? the board didn't do the due diligence. >> what are they doing? what are they getting paid for

then? what is the board of hewlett-packard being paid for? >> i'm sure they're presented with due diligence findings. i'd be astonished if they weren't. to say it's up to the board to get this stuff out -- >> who do you blame? >> bob, what you seem to be saying is -- >> i'm not blaming anyone. >> stuff happens. >> stuff does happen. frankly, with -- in the last two years, there have been 60,000 deals. to say this proves there's something fundamentally flawed about deals or hp or anything else, i think it's a little naive. >> okay. what happens when a stock loses half of its value? just happens? >> well, no, it just doesn't happen. >> whose fault is that? >> why are we searching for the fault on this? there's going to be litigation. there's always -- there's going to be litigation. we don't know what the facts are. the management of the target is saying, what are they talking about? there was no fraud here. i think it's a little bit of a rush to judgment.

>> we think you're being a little cavalier about this. >> this is one of the most widely held companies in the world. investors have lost so much money as a result of failed leadership and poor decision making on the board and the management team. >> and now this deal. >> now you have the ceo of autonomy, the former ceo of autonomy coming out trying to say, well, they did the due diligence. you don't have two sides here telling different stories. someone's not telling the truth. >> i think what -- all i'm saying is, let's see how this plays out. i don't think it's fair -- certainly not fair in my judgment to blame the board. we don't know enough. >> can we blame the auditors? >> i think we have to see how the facts play out. >> who do you think the following people want to blame? these are the largest pension fund holders. >> shame on them for hanging on this long. >> california public employees. new york state teachers retirement. california state teachers

employees. all these pension funds. >> shame on them for hanging on this long. >> this just happens. >> i understand. the stock is at a ten-year low right now. bob, thank you. good sport. appreciate your thoughts on this today. herb, see you later. i don't know. >> i got all fired up there, bill. >> why are we rushing to blame somebody? we have to figure out what happened. >> okay. 20 minutes before the closing bell sounds. we have a market down, but off of the lows. down 25 points on the industrial average. >> still more on the hewlett-packard debacle to come. can the company be saved? that's another question to be asked. is a breakup better for shareholde shareholders? >> first, find out why our next guest says you should be buying into this market regardless of whether we get a deal on the fiscal cliff. that bullish call next up. stay with us. if you are one of the millions of men who have used androgel 1%, there's big news.

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we did a whole other segment on hewlett-packard while you were gone. it was great. but we move on. we move on to our next guests. david says the correction is a buying opportunity and he continues to invest regardless of the fiscal cliff outcome. but has fed chairman bernanke's comments today changed his view? we'll find out. >> gentlemen, good to have you on the program. thanks for joining us. >> bernanke said they don't have

the tools to help the economy if we go over the fiscal cliff. there seems to be a disconnect between monetary policy and fiscal policy. we knew about that, but it spooked the market today. >> right. yeah, i think the market, or at least the expectation is that the fiscal cliff will be resolved in some fashion. even if it isn't, it doesn't change our view. we're buying unloved and undervalued assets, things like emerging market equities that are trading at like 12 times earnings. our work has shown when you're buying under 12 pes, your one and three-year trailing returns are around 20%. >> you're buying value that could do well if we go into recession. >> correct. >> john, i guess one of the positives coming out of the bernanke lunch today was the fact he continues to reiterate the fed is going to be there. one thing he did say today, which i thought was interesting, was he said just because we say rates are going to be at low levels until 2015 doesn't mean we're suggesting that the economy will be in the dumps until 2015.

but we want to have enough wiggle room. >> right. >> does that provide a floor for stocks? >> absolutely. we think the fed's accommodative policies will continue and pick up the unemployment. we see great opportunities in small and mid-cap stocks at very reasonable valuations. >> you're doing pure stock picking. >> yes. >> does the market benefit still from quantitative easing from the liquidity the fed has been putting in here? when do we start trading purely on fundamental? >> i think the fed has had our back for a long time and will continue to have it. they're going to stay accommodative through an improvement in the economy. >> bob, what are you seeing today? we had a good selloff when bernanke spoke. looks like things have come almost all the way back. >> yesterday i said congress should go on vacation more often because nobody was around to bad mouth the fiscal cliff. the markets went up. today, mr. bernanke should have gone on vacation. the minute he started talking about the more extreme things happening, the crashing of gdp, even if the less extreme

problems with the fiscal cliff occ occurred, that's when we took the 80-point move to the downside. we've come all the way back. my sense here is there's a bit of a floor under the market right now for the next week or so. everyone believes there's still potential for a deal down the road. we have a little bit of a window here right now. i'd say it's probably until the middle of december. my sense is it's some kind of floor right now. >> well, it's not going to go away. they only have 15 days to get this work done. then they're going to go back on thanksgiving break. >> they're on break now. >> exactly. you said emerging markets. they've been sort of the hot star of the recovery for a lot of years except for the last year and a half. you look at an economy like braz brazil, for example. at its best, 7% growth. what was last quarter, .5%? does the slowdown in the emerging market throw a wrench into that? >> not really. that's where the opportunity is. the reason they're trading at such discount is because people are concerned about the

slowdown. the economy looks like it's picking up. when you're buying cheap assets, you should get a good return. >> what about the view that the debt levels around the globe are going to cap growth going forward? we're not going to have the kind of growth rates you might invest in otherwise. >> well, it may do that, but so far we've seen good earnings. stocks are relatively inexpensive. in an emerging market, they don't have the same debt levels. they don't have the same debt issues. they should be able to grow more strongly. >> are you waiting to put new money into the market until after the fiscal cliff situation happens, until we have the clarity on that? do you think we're going to see a selloff before this market goes back up? >> valuations are attractive today. our work shows you buy when things are -- >> you're not going to try and time this market? >> right. not trying to time it. >> i think the selloff -- we've gotten a selloff. this is it. i don't know if it's going to go down further or not, but theis s

a great opportunity to buy. >> two bulls. one growth player joining us. thank you. >> thank you. >> yes, we have come back. at the lows of the day, we were down 94. now the dow with about ten minutes left down just 20. >> meanwhile, violence in the middle east, another story we're focused on. the head of israel's central bank will weigh in on that and america's fiscal mess. he's with me exclusively coming up. >> looking forward to that. plus, we'll head thrive israel for the latest on efforts to end the seven days of fighting coming up.

if you were not with us earlier today, fed chairman bernanke said that the fed does not have the tools to offset the worst case scenario of going over the fiscal cliff. >> his comments earlier, the market really impacted by his comments about the fiscal cliff before rebounding. as soon as mr. bernanke said they are out of tools and it's

on congress, the dow went from down 17 points to down 70. since then, we have come all the way back. now we're down 24. look at this intraday chart. >> is there a floor under this market? i want to show you something. i was reading in the car coming down here today. this is the latest "time" magazine. this is an article in this week's issue that wonders why stocks are dead. why didn't they put it on the cover? that would have been the perfect contrary indicator. they ponder whether stocks are dead. >> to be fair, i mean, bill gross came on the show. you and i talked to him. we talked about this issue. he basically said it's not that stocks are dead but that the mentality of stocks, the mentality of owning stocks for the long term by the retail investor is dead. >> and this may be why they're not dead. >> the contrary issue. >> exactly. so thank you, "time" magazine, on behalf of the market bulls out there. we'll take a break and come back with the closing countdown. the dow down just 16. >> after the bell, we're going

to investigate what bernanke said today with famed fed critic jim grant. he says the policies are a much bigger threat to the economy than the fiscal cliff. he explains later on the cloesz close. you're watching the "closing bell" on cnbc, first in business worldwide. ♪ ♪ [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now -- but hurry, the offer ends soon. [ santa ] ho, ho, ho! [ male announcer ] lease a 2013 e350 for $579 a month at yoocal mercedes-benz dealer. had to be slow.

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okay. about three minutes left here. watch this. very much a headline-driven market today. not just for stocks. this is the dow. let's all remember, here's bernanke's comments. we were down 94 points at the low. now we've climbed our way back, down 17 points. oil market also very headline-driven today. when word got out about a possible cease fire, down we go. we're holding those lows of the day, down about 2.5% on the session. the vix was also early on all this. you saw this pop up on the volatility indicator. it's finishing the day lower as we see the market come back. down in the 15 range. let me come back over here. ben willis, i have to give you props. last week after that big selloff, you said maybe you'd be buying. now we had the big rally. >> absolutely. you saw the selloff on ben bernanke, proving he's not superman.

that you buy the dips. this is what we have. >> we still don't have any certainty. we don't know where tax rates are going to be. should i really believe it? is this a short-term trade? >> this is long-term, at least going into the end of the year. we saw the highs of september 14th. we saw the selloff. i think that was your opportunity as an investor. traders are doing something entirely different. they're still buying volatility because you had the 100-point swing. i'm still looking at the end of the year we're going to be higher than we are now. >> what is the biggest catalyst for the market in 2013? your view? >> the fed. >> the fundamentals? >> they're still good. it's not like they're bad. they're still good. equities are reasonably priced. >> don't fight the fed, bill. >> that's it. >> see you tomorrow. >> you have stan fischer and james grant. >> the head of the central bank niz real and jim grant on the

fed. i'm going it get ready for the next hour of "closing bell." >> what wouldn't you buy right now? >> high yield debt. the fed has forced people off the the risk spectrum. it's forcing them into things with yield. >> ben, this market continues to come back here. are you still going to buy into this right now? >> absolutely. i think this has some leks. if you missed the opportunity, you'll probably see a few more pullbacks going into december. in the meantime, i think the general trend is still to the upside, whether you're a technical analyst, fundamental analyst. i think the biggest risk is as was just stated, an interest rate risk. huge exposure for interest rates moving to the up side. >> all right. good to see you both. talk to you later. as we go around here, we are well off the lows of the day. we were down 94 on the low of the day. now down 12 points on